A couple of months ago, I became fundamentally very interested in the company Digital Ally ( DGLY), which produces digital video imaging, audio recording and related storage products for use in law enforcement and security applications in the U.S. and internationally. Law enforcement agencies throughout the U.S. are beginning to adopt Digital Ally's products on an increasingly massive scale, and it is becoming ever more evident that these products will soon be considered basic equipment for all police departments.

Competitor Taser International ( TASR) has a head start on Digital Ally and is already a big player in this field, due to the popularity of the usually non-lethal weapon from which the company derives its name. But just as nature abhors a vacuum, the market abhors a monopoly -- and this is where Digital Ally comes in. With municipal governments coming increasingly under the gun with respect to their budgets, they will be forced to seek the highest-quality products for the lowest possible prices. I believe Digital Ally is the hands-down winner in both categories and that its products will become the standard for use by police forces in the U.S. and throughout the world.

As I said, I was highly interested in this company a couple of months ago and was considering making an investment when suddenly the DGLY stock price took off like a rocket. I certainly wasn't going to chase the stock to make an investment, but the price action provided some excellent opportunities for monstrously profitable trades. And I have been watching DGLY ever since, biding my time from an investor's standpoint.

As you can see in the charts, my patience has paid off. After nearly doubling in two weeks, from the $9 level to more than $17, DGLY has now come all the way back down to that $9 level.

The above three adjacent charts are daily, weekly and monthly. You can see on the daily chart that the RSI shows DGLY being very oversold, near-term. The weekly chart, in the middle, is not as encouraging. It shows the MACD just in the early stages of a bearish crossover, and the RSI is not yet oversold. This indicates -- but certainly does not guarantee -- that DGLY could fall further in price. The monthly chart, on the right, shows the MACD just in the early stages of bullishly overtaking the zero line, and it also shows with the RSI that the overbought energy from September's furious rally has now been worked off.

Of the three charts, only the weekly chart shows any reason for concern, so I believe it is prudent to go ahead and enter a small position in DGLY, then patiently wait to see if an even better entry price might present itself, for the remainder of one's desired investment in Digital Ally.

As always, do your own due diligence.

-- Written by Ben Brinneman in Charlotte, N.C.

At the time of publication, author was long DGLY.

Trader Ben Brinneman, featured on MarketWatch , Bloomberg and Reuters , resides in Charlotte, N.C., and is the owner of C Squared Trading. Brinneman started his career trading bonds for U.S. Bancorp and was an analyst for a wealth management firm. Brinneman and his team at C Squared Trading have taught hundreds in a one-on-one mentorship setting via Skype or live in Charlotte.

You can follow some of their free trades and tips on Twitter at @csquaredtrading.

Trader Ben Brinneman, featured on MarketWatch, Bloomberg and Reuters, resides in Charlotte, NC and is the owner of C Squared Trading. Ben Brinneman started his career trading bonds for U.S. Bancorp and was an analyst for a wealth management firm. He was mentored by some master traders on the stock market and how to profit week in and week out. After assembling custom trading plans for other traders and friends, it was at that point he decided to create C Squared Trading, and teach other retail traders and investors the methods that had brought him success trading in the stock market.

Brinneman and his team have taught hundreds in a one-on-one mentorship setting via Skype or live in Charlotte. C Squared Trading's mentorship programs are built for those that are serious about learning how to maximize their trading by learning from an expert trader in a live setting.

You can also follow some of their free trades and tips on Twitter. Please visit C Squared Trading for more information on its mentoring program.